Thailand's foreign minister said yesterday he was hopeful of an improvement in relations with neighbouring Malaysia, strained over an insurgency raging near their border.

"I look forward to good cooperation. I am optimistic," Kantathi Suphamongkhon was quoted by the Bangkok's Nation newspaper as saying.

Ties have deteriorated since 131 Thai Muslims from southern Narathiwat province crossed into majority Muslim Malaysia in August, saying they were fleeing separatist unrest, triggering a diplomatic tussle over their fate.

"I consider this episode past and gone," Kantathi was quoted as saying.

The comments contrast with Kantathi's remarks on Wednesday, when he told reporters he had stopped speaking with Malaysia, amid an escalating war of words sparked by the border-crossing incident.

Kantathi said both countries should take advantage of "positive signals" that had surfaced in recent days, the newspaper reported.

Bangkok has 'legitimate demands'

Thai Prime Minister Thaksin Shinawatra on Thursday offered his condolences to Malaysian Prime Minister Abdullah Ahmad Badawi on the death of his wife, Endon Mahmood, and sent a deputy prime minister to her funeral.

Thailand was willing to engage with the Organisation of the Islamic Conference (OIC), despite the conference having last week said Muslims in restive southern Thailand had "legitimate demands", Kantathi reportedly said.

OIC secretary-general Ekmeleddin Ihsanoglu was "looking at the situation in the south from a distance," Kantathi was quoted as saying.

"There is a tendency to see things in black and white, when in reality it is much more complicated than that."

Nearly 1,000 people have died in unrest in Thailand's mainly Muslim provinces bordering Malaysia since January 2004.

Analysts and authorities blame the almost daily attacks in the region on Islamic separatists, organised criminals and local corruption.